Health Care Reform from two points of view

by Norma

The proposed Health Care legislation will  affect new business owners in two ways. As a small business owner, we face new requirements so the first excerpt we offer you summarizes these and provides a link to download the entire report. The second impact is how it will affect us as individuals, and that is the last segment below.

How will the new health care bill affect my small business?

from White House Executive Summary

  • Health care reform as envisioned in current draft legislation would reduce the current burdens on small firms and their workers.
  • Small businesses that meet certain criteria would be able to purchase health insurance through an “insurance exchange” – allowing them to choose among a multitude of plans that would provide better coverage at lower costs than they could find in the current small group market.
  • Many small businesses that provide health insurance for their employees would receive a small business tax credit to alleviate their disproportionately higher costs and encourage coverage. The tax credit would be targeted to those firms with employees whose average wages fall below a certain threshold.
  • The current reform options include financial incentives for medium- and large-sized firms to provide health insurance coverage through so-called “pay-or-play” provisions. Firms with payrolls or employment levels below a certain threshold, which would include the vast majority of small businesses, would be exempt from the pay-or-play provisions.
  • The creation of an insurance exchange would also provide better and lower-cost options for workers in small businesses that do not offer health insurance. Low-income individuals and families would receive sliding scale subsidies to help them purchase insurance. Additionally, health insurers would not be allowed to screen potential enrollees for pre-existing conditions.
  • The proposed reforms could help spur entrepreneurial activity by increasing the incentives for talented Americans to launch their own companies, and could increase the pool of workers willing to work at small firms. Further, successful reform would reduce the phenomenon of “job lock,” in which workers are reluctant to leave a job with employer-sponsored health insurance out of fear that they will not be able to find affordable coverage. Small firms that are unable to provide health insurance for their employees bear the greatest cost of this phenomenon.
  • Reductions in absenteeism and improvements in worker productivity resulting from better health outcomes because of expanded coverage would particularly benefit small businesses.

To continue reading, download the full report as a printable PDF

How will Health-care reform affect me?

from Newsweek, week of 1-4-2010

It’s a long way from law (a conference committee will work out the differences between the House and the Senate versions), but House negotiators are expected to largely acquiesce to the Senate, where Democrats can’t afford to lose a single vote. Here’s what to expect:

  • You will be required to buy health insurance
    You must file proof of insurance with your tax return in 2014—or pay a $95 penalty to the IRS. The fine jumps to $350 in 2015 and $750 in 2016.
  • Exchanges will provide affordable plans
    Individuals and small businesses can buy insurance through government-regulated health-insurance exchanges. Insurers must provide coverage that in 2010 would cost no more than $5,590 for a family.
  • You cannot be denied coverage based on a pre-existing condition
    Until this regulation goes into effect in 2014, the government will spend $5 billion to subsidize a high-risk pool for those with pre-existing conditions who have been uninsured for more than six months.
  • Medicaid will serve more people
    Anyone under 65 who makes less than $14,440 a year will be eligible. (Currently, the program is open only to certain categories categories of those with low income, like pregnant women and people with disabilities.)
  • Costs will be capped
    Out-of-pocket expenses will be capped based on income. A family of three earning $73,240 in 2009, for instance, would be required to pay no more than $7,733.
  • The government may help you pay your premiums
    People earning up to $43,320 (up to $88,200 for a family of four) will receive credits throughout the year to subsidize premiums.
  • Medicare drug benefits will improve
    Drug manufacturers must discount brand-name drugs by 50 percent for those spending between $2,700 and $6,154 annually on prescriptions (aka, the Medicare coverage gap).
  • Your kids can stay on your insurance longer
    Insurers typically cut off dependents upon the graduation from high school or college. The age would be extended to 26.
  • Cadillac plans may be eliminated
    That portion of a premium exceeding $8,500 for an individual ($23,000 for a family) will be subject to a 40 percent tax paid by the insurer, discouraging such plans.

Which of these points do you see affecting your business or personal finances in either positive or negative ways?

Will the new legislation, if passed as currently proposed, influence your decision to open a new business?

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